# If you have \$10,000 in CD's, with an interest rate of 4.5%

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Question description

If you had \$10,000 in CD's and the CD's can be renewed for one year at 4.5%, but decided to invest in 10-year bonds with a coupon rate of 8% which is paid semi-annually. Each bond cost \$1400, you have to pay a premium, but you believe a \$400 premium is too high, what is the maximum price you should pay for each bond, and what is the risk of the bond, and what would you with regard to this type of investment?

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